Initial public offering (IPO)

ipo: Initial Public Offering (ipo) is a company's offering of newly issued shares from treasury to the general public. It is generally the first time that a company does so - making the transition from being a closed-door privately operated company to being a publicly traded, highly visible, entity. When doing an ipo, an underwriter, i.e. a stockbroker firm, handles the distribution of shares to the public. Effectively, the brokerage firm subscribes (underwrites) for the shares and then sells them to its clients (investors). After the ipo, the shares will then trade on a stock exchange. It is sometime referred to as "going public". Entrepreneurs and VCs (Venture, or "vulture" Capitalists) sometimes call it "cashing in". Up until a company is public (i.e. anyone can buy or sell its shares), it is private and operates away from the limelight. Companies often go public to raise huge amounts of money or to give investors liquidity.

Similar financial terms

Security deposit (initial)
Synonymous with the term margin. A cash amount of funds that must be deposited with the broker for each contract as a guarantee of fulfillment of the futures contract. It is not considered as part payment or purchase.

PLC (Public Limited Company)
Under UK law there must be a minimum of seven shareholders in a PLC. There is no maximum number of shareholders allowed. Shares in PLCs can be bought or sold on the Stock Market by the general public. By implication, most big companies choose this route to growth as it provides access to large amounts of capital that can be used for investment, expansion and acquisition. Although technically owned by the shareholders, its management determines the affairs of the company. The US equivalents are I ...

Publicly traded assets
Assets that can be traded in a public market, such as the stock market.

Public warehouse
Warehouse operated by an independent warehouse company on its own premises.

Public Securities Administration (PSA)
The trade association for primary dealers in US government securities, including MBSs.

Public offering
The sale of registered securities by the issuer (or the underwriters acting in the interests of the issuer) in the public market. Also called public issue.

Public goods (collective goods)
These are a distinctive class of goods which cannot practically be withheld from one consumer without withholding them from all (the "nonexcludability criterion") and for which the marginal cost of an additional person consuming them, once they have been produced, is zero (the "nonrivalrous consumption" criterion).

The classic example of a nearly pure public good is national defense: you cannot defend the vulnerable border regions of a country from the ravages of foreign invaders witho ...

Reoffering yield
In a purchase and sale, the yield to maturity at which the underwriter offers to sell the bonds to investors.

Primary offering
A firm selling some of its own newly issued shares to investors.

Offering memorandum
A document that outlines the terms of securities to be offered in a private placement.

Negotiated offering
An offering of securities for which the terms, including underwriters' compensation, have been negotiated between the issuer and the underwriters.

Competitive offering
An offering of securities through competitive bidding.

Initial Public Offering. The first sale of stock by a private company to the public. IPOs are often smaller, younger companies seeking capital to expand their business. Also known as going public

International Fiscal Police (INTERFIPOL)
The tax crime counterpart to INTERPOL.

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